OMV to invest USD36 million in glycerin-to-propanol pilot plant in Austria

MOSCOW (MRC) -- OMV (Vienna, Austria) says it will invest EUR30 million (USD36 million) building a glycerin-to-propanol pilot plant at its refining and petrochemicals complex at Schwechat, Austria, with the propanol produced to be used as a sustainable feedstock for chemicals, in addition to being a bio-additive for gasoline, reported Chemweek.

Construction is scheduled to start in the second quarter of 2021, with the unit to be operational in 2023, it says. The plant will use a catalyst developed inhouse by OMV to produce propanol from waste-based glycerin, a byproduct from biodiesel production. The propanol will be used mainly as a bio-additive to reduce gasoline’s carbon dioxide (CO2) footprint, but with other applications to include as a “sustainable feedstock for the chemicals market as a replacement for fossil-based propanol,” it says.

The pilot plant investment follows five years of research, says OMV. The new unit will be located adjacent to the company’s ReOil plant, which produces synthetic oil from waste plastic for use in nearby olefins and polyolefins plants operated by its subsidiary Borealis, so that both facilities can utilize a single measuring station and synergies, it says.

The pilot plant’s capacity of 1.25 million metric liters/year of propanol will lead to an estimated reduction in CO2 emissions of around 1,800 metric tons/year, it says. OMV says the long-term plan is to commercialize the glycerin-to-propanol technology to produce around 125 million liters/year of propanol and reduce CO2 emissions by around 180,000 metric tons.

OMV last month announced it would invest about EUR25 million, in partnership with Kommunalkredit, building an electrolysis plant for the production of green hydrogen at Schwechat. The 10-megawatt (MW) polymer electrolyte membrane (PEM) electrolysis facility will produce up to 1,500 metric tons/year of renewable hydrogen, with the plant expected online in the second half of 2023.

As MRC informed earlier, OMV (Vienna, Austria) says it is investing EUR40 million (USD48 million) to expand and modernize a steam cracker and associated units at its refining and petrochemicals complex at Burghausen, Germany. The upgrade will increase the site’s ethylene and propylene production capacity by 50,000 metric tons/year. Following a planned turnaround of the refinery, the revamped cracker and petchem units are expected to start operations in the third quarter of 2022. Initial groundwork is already underway ahead of the upgrade.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.
MRC

MOSCOW (MRC) -- Specialty chemicals company LANXESS is raising its prices for 1,6-hexanediol (HDO) globally with immediate effect. The increase amounts for EUR 800 per metric ton, said the company.

HDO is an important precursor for high performance coatings, fibers, adhesives, polyurethanes, polycarbonate diols, and as reactive diluent for epoxy resins.

As per MRC, LANXESS announced force majeure at its maleic anhydride plant in Baytown, Texas, due to a shortage of raw materials and a safety shutdown. The capacity of the company's plant in Baytown is 75,000/tonne.

Maleic anhydride is a raw material for the production of tetrahydrofuran, tetrahydrophthalic anhydride, films and synthetic fibers, pharmaceuticals, detergents, plasticizers, maleic, succinic, fumaric and malic acids and a number of agricultural chemicals.

Plasticizers are substances introduced into a polymer material to make it elastic and plastic during processing and operation. In particular, plasticizers are used for the production of polyvinyl chloride (PVC). The share of plasticizers used for the production of PVC products is about 80%.

According to the ICIS-MRC Price Report, price discussions for March supplies of Russian PVC began; supplies of Russian PVC with K64 / 67 were discussed in the range of Rb116,000-120,000/tonne CPT Moscow, including VAT, for volumes up to 500 tonnes, against Rb112,000-115,000/tonne CPT Moscow, including VAT in February.

LANXESS is a leading specialty chemicals concern with a turnover of EUR7.2 billion in 2018. The group employs approximately 15,400 people in 33 countries. Currently, the concern includes 60 manufacturing enterprises. LANXESS's core business is the development, production and marketing of chemical intermediates, additives, specialty chemicals and plastics.
MRC

1. Chinese demand recovery hopes fade for Atlantic Basin crude sellers

MOSCOW (MRC) -- With barrels of crude oil that will arrive in China in May now changing hands, hopes that demand from its refiners for African and European crude would tick higher following spring maintenance may have been premature, reported S&P Global. After a bumper 2020 for sales to China, 2021 has got off to a slow start with demand for long-haul crude hit by higher flat prices, refinery maintenance season and fresh restrictions on mobility on the back of an uptick in coronavirus levels which coincided with Lunar New Year celebrations. About 50 million mt/year of refining capacity at six state-owned refineries - five Sinopec and one CNOOC - was expected to be shut over the March-April period, while May could also witness some maintenance, albeit at a relatively lower level, industry data and information collected by S&P Global Platts showed.


MRC

MOSCOW (MRC) -- Crude oil futures rose during mid-morning trade in Asia March 5, even as a stronger US dollar slowed the rally triggered by the OPEC+ decision to keep production quotas largely steady in April, reported S&P Global.

At 11:14 am Singapore time (0314 GMT), the ICE Brent May contract was up by 68 cents/b (1.01%) from the March 4 settle to USD67.42/b, while the April NYMEX light sweet crude contract was up by 60 cents/b (0.94%) to USD64.43/b.

The overwhelmingly bullish sentiment in the oil market was held back slightly by the rapid appreciation in the US dollar, which made crude more expensive for buyers holding other currencies. At 11.00 am in Singapore, the March ICE US dollar index futures were trading at 91.670, up 0.801% from the March 4 settle.

"The markets are on a bit of a fence this morning despite the bullish OPEC+ decision, as rising treasury yields and safe haven demand has pushed the US dollar up, and a risk-off sentiment has gripped the markets," Pan Jingyi, senior market strategist at IG, told S&P Global Platts March 5.

The appreciation in the dollar has provided some resistance to the surge in oil prices after the OPEC+ alliance decided to keep production quotas largely steady for the month of April, with Saudi Arabia extending its unilateral 1 million b/d output cut indefinitely. Only Russia and Kazakhstan were granted 130,000 b/d and 20,000 b/d increases in their production quota, respectively.

The coalition's decision means that it will keep 8 million b/d of crude production - or roughly 8% of pre-pandemic supply - off the market for at least another month. The oil market reacted by sending the Brent and NYMEX light sweet crude markers hurtling 4.17% and 4.16% higher to settle at USD66.74/b and USD63.83/b, respectively, on March 4.

Delegates to the OPEC+ meeting said the decision was prompted by lingering uncertainty over the economic recovery, which could still be derailed by uneven vaccine rollouts and stringent lockdown measures.

"I belong to the school of being conservative," Saudi Arabia's energy minister Prince Abdulaziz bin Salman said after the meeting, having earlier told OPEC+ that "the right course of action now is to keep our powder dry, and to have contingencies in reserve to insure against any unforeseen outcomes."

The OPEC+ decision came as a surprise to the market, which had braced itself for the possibility of a significant increase in the coalition's supply from April onwards, and had at the very least expected Saudi Arabia to end its 1 million b/d production cut.

"Expectations were high for the Saudis to end their voluntary 1 million b/d cut and for the group to collectively raise output by 500,000 barrels," Edward Moya, senior market analyst at OANDA, said in a March 5 note.

"Oil prices could rip higher now that a tight market is likely up through the summer. WTI Crude at USD75/b no longer seem outlandish and Brent could easily top $80/b by the summer," Moya added.

As MRC informed previously, oil producers face an unprecedented challenge to balance supply and demand as factors including the pace and response to COVID-19 vaccines cloud the outlook, according to an official with International Energy Agency's (IEA) statement.

We remind that the COVID-19 outbreak has led to an unprecedented decline in demand affecting all sections of the Russian economy, which has impacted the demand for petrochemicals in the short-term. However, the pandemic triggered an increase in the demand for polymers in food packaging, and cleaning and hygiene products, according to GlobalData, a leading data and analytics company. With Russian petrochemical companies having the advantage of access to low-cost feedstock, and proximity to demand-rich Asian (primarily China) and European markets for the supply of petrochemical products, these companies appear to be well-positioned to derive full benefits from an improving market environment and global economy post-COVID-19, says GlobalData.

We also remind that in December 2020, Sibur, Gazprom Neft, and Uzbekneftegaz agreed to cooperate on potential investments in Uzbekistan including a major expansion of Uzbekneftegaz’s existing Shurtan Gas Chemical Complex (SGCC) and the proposed construction of a new gas chemicals facility. The signed cooperation agreement for the projects includes “the creation of a gas chemical complex using methanol-to-olefins (MTO) technology, and the expansion of the production capacity of the Shurtan Gas Chemical Complex”.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.
MRC

MOSCOW (MRC) -- Dow Chemical has been resuming operations at its propane dehydrogenation (PDH) unit in Freeport, Texas, reported S&P Global.

This PDH unit with the capacity of 750,000 mt/year of propylene was taken off-stream on 16 February, 2021, because of very low temperatures in the region.

As MRC informed earlier, last year, Dow Chemical conducted a scheduled maintenance at its PDH unit in Freeport. Thus, the planned turnaround started in the week ended July 10 and lasted for 45 days.

Propylene is the main feedstock for the production of polypropylene (PP).

According to MRC's ScanPlast report, PP shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.

The Dow Chemical Company is an American multinational chemical corporation. Dow is a large producer of plastics, including polystyrene, polyurethane, polyethylene, polypropylene, and synthetic rubber.
MRC